Kaiser Aluminum Corporation (KALU)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,267,400 | 2,288,800 | 2,422,400 | 1,864,700 | 1,526,200 |
| Total stockholders’ equity | US$ in thousands | 652,200 | 631,200 | 692,500 | 732,400 | 733,900 |
| Financial leverage ratio | 3.48 | 3.63 | 3.50 | 2.55 | 2.08 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,267,400K ÷ $652,200K
= 3.48
The financial leverage ratio of Kaiser Aluminum Corp has exhibited variability over the past five years, ranging from 2.08 in 2019 to 3.63 in 2022. The ratio measures the extent to which the company relies on debt to fund its operations and growth activities. A higher financial leverage ratio indicates a higher level of debt relative to equity in the company's capital structure.
From 2019 to 2020, there was a significant increase in the financial leverage ratio from 2.08 to 2.55, indicating a growth in the company's debt relative to equity. This suggests a shift towards increased reliance on debt financing during this period.
Subsequently, there was a further increase in the financial leverage ratio to 3.50 in 2021, indicating a continuation of the trend towards higher debt levels. However, in 2022, the ratio peaked at 3.63, reflecting a substantial uptick in the company's debt compared to equity.
By the end of 2023, the financial leverage ratio decreased slightly to 3.48, indicating a modest improvement in the company's debt-to-equity ratio. Overall, the trend in Kaiser Aluminum Corp's financial leverage ratio suggests that the company has been progressively increasing its reliance on debt financing in recent years. This could potentially expose the company to higher levels of financial risk, particularly in economic downturns or during periods of rising interest rates.
Peer comparison
Dec 31, 2023